Food export bans by African countries will only worsen a price crisis threatening to drive inflation higher and stifle growth on the continent, African Development Bank President Donald Kaberuka said on Wednesday. Liberia this week became the latest country to announce a ban on all food exports to try to tackle a surge in global prices, after similar moves by other states, including Malawi. “We must discourage the multiplication of export bans, quotas, export taxes which are exacerbating the problem. ‘Beggar thy neighbour' will be damaging to all,” Kaberuka said at the opening ceremony of the AfDB's annual meeting in Maputo. “There is no better way to worsen the situation than to interfere with supply chains at a delicate stage such as this.” Rising global food and fuel prices could ignite inflation and push up interest rates, further damaging growth on the poorest continent as the world economy slows. Food costs have sparked riots and protests in many African countries, with the poor, who spend the bulk of income on food, the hardest hit. Almost half of the continent's 900 million people live in poverty. Kaberuka said the crisis required coordinated solutions and not hasty actions by some countries. “Food security is impossible anywhere without a smooth trading system; local, national, regional and global, and I hope after the initial action taken by some countries the barriers can be reduced, or removed altogether,” he said. The International Monetary Fund said high food prices could widen trade deficits in oil-importing African countries by about one percentage point in 2008, and, together with higher oil prices, were adding to inflationary pressures. “In terms of balance of payments, we estimate that, on average, it will increase the trade balance deficit of countries by 1 percent of GDP (but) in some cases, it is even more serious,” Benedicte Vibe Christensen, IMF director for Africa, told Reuters. Trade balances could deteriorate even further if the prices of other commodity such as metals mined extensively in Africa, became delinked from oil prices, thereby reducing export earnings, she said. The AfDB recently announced an increase of $1 billion to its portfolio of agricultural loans to help boost farm output with total funding reaching to $4.8 billion, and $250 million to assist some countries deal with immediate financial problems.
